Open innovation is the principle of combining both internal and external sources to develop and market new technologies and products. More and more companies operate on this principle. The momentum of open innovation is breaking away from established practice of "closed" innovation. The latter is an organisational model that evolved from the time of the industrial revolution, with top-down management and where employees were just cogs in the machine.
With the increased availability of information, particularly via the Internet, the closed innovation model is no longer tenable. This creates new, organisational structures of motivated, hard-working people producing more, high quality product than is possible from employees still labouring under a strict management hierarchy.
Open source software communities (such as Linux and Apache) and Wikipedia are often cited as examples of how people can organise themselves today.
Under the open model, ideas flow into and through an organisation. Companies acquire external expertise by participating in knowledge networks such as colleges and universities, or they invest in companies of particular interest to them. They can no longer internally commercialise knowledge as an external business model either by selling licences or by launching spin-offs.
Open innovation and collaboration systems allow consumers to participate, give employees more autonomy, enhance efficiency, stimulate creativity and lead to new forms of leadership that motivate communities – far better than a traditionally hierarchical system could ever do.
The most successful organisational models of the future are hybrid: a combination of open innovation and traditional working practice, and of commercial and collaborative work. Open innovation has a different perspective from that of closed or traditional ways of thinking and working, including:
- many smart people will not be working for you – but open innovation gives you access to their skills;
- being distinctive makes the difference – stand out from the crowd;
- sell your values as well as to your value – customers seek suppliers who stand for something;
- you win with the smartest customers – by developing ideas with them; and
- nobody knows everything – the more people thinking about it, the simpler your problem is.
Drawing on our background and experience with Open Source Software communities, Gendo is uniquely positioned to discuss with you what open innovation and open collaboration models can do for your organisation.